Barclays maintains 2014 LME Lead price forecast at $2,239 a ton

 Barclays maintains their full year LME lead price forecast at $2,239 a ton while the metal's first-quarter prices were slightly softer than expected averaging $2,105 a ton, compared with their forecast of $2,200 a ton.

According to Barclays, the fundamental picture for lead continues to look constructive with the market in a modest deficit and reported stocks-to consumption very low.

Data from the ICSG show that the US lead market deficit continues to increase, though we believe that may be partially exaggerated by record-high imports in January. 

Barclays understands that some of those imports went to unreported stock builds, with market participants keen to hold a more comfortable inventory buffer given the lack of domestic production following the closure of the Herculaneum smelter.

Globally, demand is being supported by the build out of 4G networks, especially in China, India and, to a lesser extent, Africa. Stationary battery demand for this use is expected to be a significant contributor to global lead demand alongside solid transportation demand, especially in China and from a recovering European autos market.

The restructuring of Exide Technologies could further tighten the US market depending on what it decides to do with its smelter assets. Regardless, the risk is for significant disruption since a sale would require new owners to make the facilities environmentally compliant. Alternatively, if Exide kept its US smelters, it could use this to feed at least part of it battery operations. However, smelter upgrades would still be required, leading to closures and likely production disruptions, which could tighten US supply further.

Aluminum demand underpins by improving economy, emissions rules: BofAML

Demand for aluminum is underpinned by an improving economy and tighter emissions regulations for automobiles, said Bank of America Merrill Lynch.

The fundamental backdrop outside of China has especially improved, and the bank says the world excluding China may post a 590,000-metric-ton supply deficit this year after a 3.2 million-ton surplus in 2009.

“Focusing on demand, the rebound in offtake was of course heavily influenced by a recovery of economic activity, highlighted also in aluminum demand's beta of two times global GDP growth,” the bank added.

“The cyclical boost has been mirrored in a high correlation between global vehicle sales and the metal's consumption as well.” In addition to higher vehicle production, the sector’s shift toward lighter vehicles, in order to meet emissions standards, also means more use of aluminum in cars,” said the analysts with Bank of America Merrill Lynch via Kitco News.

“Car manufacturers can comply with stricter regulations by a combination of factors, including a reduction in vehicle weight. Considering that aluminum has a lower density compared to other raw materials like steel, it can be a material of choice to reduce a vehicle's weight,” the bank concluded.

China copper premiums hit nearly 3-yr high on tight credit, robust demand

* Domestic copper trades at 1,500 yuan above ShFE front-month contract

* China traders see strong downstream copper demand

* But high local premiums attract metal out of bonded zones

Premiums in Chinese copper markets rallied to their highest in almost three years this week as robust demand met tight local supply, industry sources said, although levels could ease slightly near term.

Soaring premiums - the price paid on top of local cash futures prices to obtain metal - have surprised some given sluggish factory growth in the world's top consumer, suggesting that Chinese demand in some sectors may be holding up better than broader data suggests.

Domestic copper supply has also dwindled after Chinese producers sold stocks to global markets in March, while financing deals have locked away stocks from the market.

Some banks have also curbed credit terms, making it harder for small consumers such as air conditioner manufacturers to import metal, traders said, prompting those firms to run down their inventories.

"Domestic supply is so tight it has boosted the premium, while downstream orders are strong," said a trader at a Chinese copper smelter in the eastern province of Shandong.

Activity in China's factories increased marginally in April but export orders fell sharply, adding to questions about whether the world's No.2 economy is stabilising after its first-quarter slowdown.

Still, state spending on China's power grid grew by 13 percent to record levels in the first quarter, while production of white goods, automobiles and electronics is expanding between 5 to 15 percent, said analyst Joel Crane at Morgan Stanley in Melbourne.

"Inventory is low and we're in peak demand season. The key copper end-use sectors are growing at a reasonable clip. As long as those conditions remain, the premium should stay high."

China is the world's top copper consumer, accounting for around 40 percent of demand. Power grid investment makes up the lion's share at around 47 percent, Morgan Stanley says.

Physical copper CU-1-CCNMM on China's local market traded at a 1,570 yuan ($250) premium to the front-month Shanghai Futures Exchange contract on Monday - the highest since Oct. 2011.

That represents a more than 80 percent advance on the $138 charged by top producer Chile's Codelco for 2014 term shipments, which are paid above London Metal Exchange cash prices.

SUPPLY DRIED UP

Local supply dried up from March, when a bond default by a solar equipment maker pushed copper prices to more than four-year lows, sparking worries of a meltdown in China's credit markets that could up-end financing deals.

Those transactions are typically used by importers to get around China's tight credit and currency controls, and are a key driver of the country's imports.

In a typical deal, an importer gives a yuan deposit to a bank for a letter of credit in dollars to buy copper, then resells the copper into the domestic market to raise cash that can be used for higher yielding investments such as real estate.

While the vast majority of these deals are fully hedged, the sharp drop in local prices encouraged producers to sell copper to higher priced global markets cutting the volume of metal on hand at home.

That helped to bump up stocks in China's bonded zones to around 800,000 tonnes, according to several trader estimates, from 560,000-660,000 tonnes in late February.

China's state stockpiler also bought when prices were low, sucking up at least 200,000 tonnes.

But worries about defaults linger, with traders noting tighter credit conditions in the past month especially for 1-year LCs from western financial insitutions.

Still, higher premiums have begun to entice metal back to the domestic market, and premiums could ease when Chinese markets reopen on Monday after public holidays at the end of this week.

"When premiums spiked the other day, we began to see (traders) looking to import the material and move it back onshore," said a trader at a bank in Singapore. 

($1 = 6.2593 Chinese Yuan) 

GOLD MAJOR RESISTANCE $1312 ABOVE THAT IT CAN TOUCH $1356

GOLD SUPPORT :- 1277, 1283, 1295  

RESISTANCE :- 1307, 1312, 1327, 1346 AND LAST 1356.

Altyn means Gold, Eurasian Economic Union And Formation Of Joint Currency

Several Russian media outlets have reported that Russia, Kazakhstan and Belarus, that currently form the Eurasian customs union, will sign an agreement in May to accelerate the formation of an economic union and a joint currency: Altyn.

On the territory of several Russian principalities the currency Altyn has been circulating from the 15th century until 1991. Originally it was made of copper, the silver Altyn appeared during the times of Peter the Great.

I added English subtitles to the video below, press the ‘captions button’ to activate.

Transcript of the video:

ALTYN BECOMES THE NEW CURRENCY FOR CUSTOMS UNION

NEW EURASIA CURRENCY MAY APPEAR IN THE NEXT FIVE YEARS

A new currency for the Eurasian Economic Union, “Altyn” may enter into circulation within the next five years. In May, the Presidents of Russia, Kazakhstan and Belarus will sign an agreement on the establishment by 2015 of the Eurasian Economic Union. This unique partnership and single economic space will be a response to the European Union. It is not excluded [It is possible] that this may eventually develop into a military- political alliance which is able to compete with NATO and China. The original idea for creation of a single currency belonged to President of Kazakhstan Nursultan Nazarbayev. In 2012, it was supported by Russia’s President Vladimir Putin. It was originally planned to create a currency in 2025, but the introduction of serious economic sanctions against Russia may begin to accelerate plans for this new currency market.

Other media outlets that reported this news were Pravda.ru and Moskovsky Komsomolets. From these leads I did some searching on official sources on the development of the Eurasian Economic Union (EEU) and Altyn. What I found was that the EEU is in an advanced stage, on Altyn I couldn’t find much so I’m not convinced this currency will be introduced within 5 years. Presumably only an “oral agreement” between the states has been made on the joint currency.  

From Wikipedia:

The Eurasian Customs Union was launched as a first step towards forming a broader European Union-type economic alliance of former Soviet states. The member states are planning to continue with economic integration and were set to remove all customs borders between each other after July 2011. On 19 November 2011, the member states put together a joint commission on fostering closer economic ties, planning to create a Eurasian Union by 2015. Since 1 January 2012, the three states are a Single Economic Space (SES) to promote further economic integration. The Eurasian Economic Commission (EEC) is the regulatory agency for the Customs Union.

United States foreign policy opposes the Customs Union, claiming it as an attempt to “re-establish a Russian-dominated USSR-type union amongst the Post-Soviet states”

Documents from the Eurasian Economic Committee confirm the formation of the Eurasian Economic Union. Kyrgyzstan, Armenia and Tajikistan may join the new financial and economic organisation. Currently the three member states are at stage III of their integration process, they aim to reach stage IVby the end of 2015. Especially Putin is keen on closing a deal to move away from the petrodollar in conjunction with allies in central Asia.

Development Stages Eurasian Economic Union

As was being said in the video above the President of Kazakhstan Nursultan Nazarbayev was the first to come out with the idea to form a joint currency. According to Pravda.ru Nazarbayev is of the opinion the US dollar is an illegal and non-competitive means of payment “the world currency was not de jure legitimate because it was never adopted by any communities or organizations. There is no such international law,… the world currency market is not a civilized market, as the system of world currency issuance is not being controlled.” He said. Nazarbayev believes the world is heading towards a new monetary system; from “defective capitalism” to “the new capitalism that would be based on a non-defective currency – self-growing global wealth.”

Fun Facts About The Eurasian Economic Union

Russia’s economy is eight times smaller than that of the US, but by forming a new ‘empire’ on top of a vast amounts of resources this economic block will be a serious threat for the US petrodollar. Russia is now speaking openly about getting rid of the US dollar for trading energy, it’s building its own payment system and closing gas export deals with China - the other Asian empire. The Eurasian Economic Union will be a powerful stab at the US dollar hegemony.

By the way, in Kazakhstan “Altyn” means … gold.

Article : In Gold We Trust

Marc Faber Warns "Social Media Stocks Are Just The Start, Market Crash Coming In 2nd Half"

Having called for the demise of the hype/hope growth stocks, biotech, and social media schemes at the end of 2013, Marc Faber believes the weakness in those sectors is a signal of things to come (and that the so-called "rotation" to quality stocks is fallacious in the medium-term). 

Faber carefully notes that the size of markets allows some stocks to move up as others move down and so the overall market "looks" ok, but warns "we have already had a big break in parts of the market... but we haven't had the big break in the overall market," adding that "it's too late to buy the US stock market," confirming what we noted about Jeremy Grantham's dismal outlook for US equities in the medium-term (and how and when the bubble bursts). 

Simply out, given yields around the world and the fundamentals, "individual investors have excessively optimistic expectations about their future returns," which is terrible news for the record amounts of Greater Fools piling in as professionals pile out.

Another Post : Marc Faber's 2014 Predictions of 30th December 2013

I recently started to follow him & found DOW JONES made a High 16558 on 31st Dec 2013 and crashed to 15340 on 05th Feb 2014, on the other hand Gold made a Low 1181 on 31st Dec 2013 and Rallied to 1393 on 17th March 2014.

Don’t force us to go to WTO, India tells EU on Mango ban

EU should ‘see sense’ and resolve issue through dialogue, says Anand Sharma

Raising the pitch against import ban on mangoes placed by the EU, Commerce and Industry Minister Anand Sharma has said that the bloc should not “precipitate’’ a situation that requires India to take the matter to the World Trade Organisation.

“We do hope that the EU will see sense, considering the strengths of the economic partnership between the two, and not precipitate a situation which needs us to go to the WTO. We hope the issue will be resolved bilaterally between India and the EU,” Sharma said addressing a press conference on Friday.

‘Ban unfair’

The EU banned import of mangoes, bitter gourd, taro, egg plant and snake gourd from May 1 following detection of insects in some consignments.

India says that the ban is unfair as it has now put in place stringent packaging and inspection norms to ensure that such incidents do not recur.

India has made it mandatory for exports of all perishable items to the EU to be routed through pack-houses certified by the Agriculture and Processed Food Products Export Development Authority (APEDA) under the vigilance of plant protection inspectors.

World class labs

“We have, through APEDA, invested in creating world class laboratories and their certification processes are accepted by the EU, the US and other countries.

“That is why the APEDA, with the Commerce Ministry, has taken up the matter with the EU,” Sharma said.

The Minister added that India’s Ambassador to the EU in Brussels has been given clear instructions and the mandate of what to convey to the 27-member bloc.

“Let us wait for a response,” he added.

Hurts farmers

Although only about 5 per cent of India’s total exports of perishables to the EU estimated at €400 million have been affected by the ban, Sharma said that such ban hurts resource-poor farmers.

Sharma has already written to EU Trade Commissioner Karel De Gucht against the ban and demanded that it be lifted soon.